A Place to Stand

Comments from Scotland on politics, technology & all related matters (ie everything)/"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."Henry Louis Mencken....WARNING - THE LIBERAL DEMOCRATS HAVE DECIDED THAT THIS BLOG IS LIKELY TO BE MISTAKEN FOR AN OFFICIAL PARTY SITE (no really, unanimous decision) I PROMISE IT ISN'T SO ENTER FREELY & OF YOUR OWN WILL

As governments grow, the law of diminishing returns begins operating. While the construction of roads initially assists output expansion, the construction of secondary roads and upgrading primary roads start to have less added positive impact per dollar spent. Moreover, the taxes and/or borrowing levied to finance government impose increasing burdens. Low tax rates become higher. New taxes, such as income taxes, are added to low consumption levies, with increasingly adverse effects on human economic behavior. Tariffs are raised, thwarting trade. New government spending no longer enhances economic growth.

......The Curve peaks where government spending equals 17.45 percent of GDP. Since federal spending in recent years has been between 20 and 22 percent of GDP, the results suggest that the federal government is 12-20 percent too large from the standpoint of growth optimization.

This is a US Federal government figure. It does not include State spending which is about 14% of GNP. It also includes relatively little for health care since relatively little health care is provided by the government. However the US spends about 15% of GNP on health care while Britain's 9% is very largely part of government spending. Adding State spending & say 2/3rds of health care would bring US spending up to at least the equivalent of the 43% of the economy the British government spends so we are not very different.

I don't actually think the Armey Curve is that good a predictor for 2 reasons.

Firstly it implicitly assumes that the degree of efficiency with which government spends cannot be changed. I, on the other hand, can imagine a government with a very big public sector which nonetheless manages efficiently (Singapore, whose government owned airline is one of the world's best for example) or ones with a relatively small public sector which is virtually all going to feed the kleptocracy (much of Africa).

Secondly a very large amount of the costs government enforces on the economy are regulatory ones. The cost to government of enforcing regulation is about 1/20th of the cost to industry of being regulated. If anything this is more economically damaging since money government spends on employees or goods keeps circulating while money spent on the 12/13ths of British building projects which is regulatory merely goes into a hole in the ground.

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What the first graph shows is that decadal growth fell from about 49% to 30% from the mid 1960s. The same effect happened in Europe. This is from 4% annual growth to 2.6%. The second graph, while it shows some increase in government spending in the mid 60s wasn't enough to explain the sharp fall in growth. What I think we are seeing is a major growth in purely parasitic government spending & in particular environmental regulation & subsidies for "environmental" solutions.

I have questioned how much "environmentalists" really care about the environment & how much they are merely Luddites under false colours. Beyond that I would suggest hat under public choice theory & Pournelle's Iron Law of Bureaucracy one should expect those running the state to promote philosophies that demand more state spending. What we see is an extremely strong bias by the state & its propaganda mouthpieces (the "respectable" media & particularly the BBC towards ever more silly & expensive sort of "environmentalism". This produces the question - who is running the eco-movement. Is it its leaders or is it the propagandists & donors supporting them. Or is it the empire builders running state bureaucracies. Public choice theory would suggest that the bureaucrats come closest but that even they are held by economic forces in that they will lose control if they aren't sufficiently dedicated to empire building.

In any case, whether we consider we are dealing with villainy or impersonal forces, the effect is that the "environmentalist movement seems to have been responsible for 1% decline in economic growth since about 1965. In fact it may well be larger because we have seen the better run parts of the developed world growing much faster than ever before in history & Moore's Law, that computer capacity doubles every 18 months, would also imply faster growth likely.

However even assuming the foregone growth has been only 1.4% a year since then this means that our economy & therefore all our incomes pre-tax would be at least 1.82 times what they actually are. Our economy currently is worth about £1.4 trillion a year. That means the "environmental" movement is costing us at least £1,148 billion each year (£19,000 for every man, woman & child). Because of the growth seen in the Tiger economies I actually suspect growth could have been significantly above the historical average but that is a sufficiently impressive figure to be going on with.

Friday, July 11, 2008

I think that is true only if he considered being a senior cabinet Minister as the height of a political career. I recognise that to many, indeed most politicians it is.

A different way of looking at it is to be ambitious to do something rather than to hold a position. I think that is what he has chosen. He is not going to get the top job but then he wasn't anyway.

What he is now going to get is the massive approval of the public & of party members. Next time he speaks at a Conservative Conference the applause will raise the roof. If he uses it wisely he will have more control over the Tory agenda than anyone but Cameron & possibly more influence with their next political generation than anyone at all.

This gives him an influence over the broad Tory agenda greater than any possible Minister other than Cameron. From the back benches he is in a position to push anything he likes & to be listened to which is not given to mere ministers. Indeed he is much freer to enter public debate than Cameron, who has to watch every word for political incorrectness. When the Tories form the government he he will be able to look beyond day to day matters at the long term - something which ministers with their Red Boxes simply don't have the time to.

He will hold a unique position in the party as its conscience, think tank & Nelson Mandela all rolled up in one. Michael Foot held a similar though much lesser position in Labour until he was foolish enough to destroy his career by becoming leader.

He has managed this by the singular feat of finding a way of resigning from shadow cabinet without having to criticise his boss (& therefore the boss dare not criticise him) Demonstrating courage an independent mind & loyalty all at the same time. It may well be that he likes Cameron no more than Brown liked Blair & unlike that partnership there are clearly real policy differences between them. However Cameron has played his hand with less naked ambition & far more finesse.

The Radio is, in best Dad's Army style telling us not to panic - that a we might talk ourselves into a recession & that it is vital to keep our confidence up.

Hogwash.

The way not to have a recession is to let technology & freedom work. Cut business taxes, cut regulations, cut government spending. In 1989 Ireland was in such a recession & that is what they did. They were forced to change direction by their failure - we can too.

Allow the free market to produce as much electricity as required since the correlation between electricity production & economic production is well established. Stop regulating every new industry like GM out of existence. Get government out of the way and stop pandering to the parasites who don't understand civilisation & wouldn't like it if they did.

There is no shortage of desire to invest on the part of business. If that were not so we wouldn't be seeing all these "bubbles" - they are all signs of people investing in anything at all if there are no good investments about. If business really thought we were going to start having sufficient cheap power in 3 1/2 years (as they have in China today) which is the time it can take to build a reactor, there would be no problem with investing. If we knew we were not shortly facing blackouts nobody would have to "talk up" confidence.

There is no intrinsic reason for fear - we know technology is continuing to improve, that Moore's Law continues to operate, that there is unlimited nuclear energy for the lifetime of this planet, that we can start exploring & exploiting the Universe any time we have the gumption.

We have far less excuse for catastrophism than at any time in history yet we may see half the world, our half, going into recession while the other half keeps growing at up to 10%.

Since this has "long been known" & going on since 1994 while NATO went to war the assist them in 1999 & appears to have been extensively organising, funding & arming them since 1997 there can be no question that they were unaware of exactly what they were involved in by either NATO or its/our media.

Doing a Google News search turns up 1 entry which hasn't actually reached any public outlet:

PRISTINA, Kosovo, June 27 (UPI) -- The Council of Europe has launched an investigation into allegations that rebels in Kosovo sold human organs forcibly removed from Serbs.

The council appointed Dick Marty, a Swiss senator and lawyer who investigated CIA rendition flights in Europe, to lead the investigation..... well I guess we can look forward to something equally anodyne again...Del Ponte claimed as many as 300 people mostly Serbs, after the war were taken from Kovoso to Albania and that some of those people may have had their organs traffickedno she said "some 300" in one specific proven instance, that they were all Serbs 7 that they had all been murdered this way

Del Ponte said these organs had been flown out of Tirana to Europe. There is unquestionable that the landings, recipients of organs & who they paid for them will be on record & could be traced by policemen wishing to do so. Whether a senator will do so is something we can only speculate on.